Silver price prediction: XAG/USD extends 4-week winning streak ahead of Fed decision

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Sholanke Dele

12.09.2025

Silver price prediction: XAG/USD extends 4-week winning streak ahead of Fed decision — Silver gains stretch to fourth week

Silver broke out of a six-day consolidation on Friday, extending the upward momentum that has defined much of September’s trading. The move higher followed two consecutive days of gains and was supported by a favorable macro backdrop that continues to encourage demand for precious metals.

- Silver breaks above $42 as weaker dollar boosts safe-haven demand outlook.

- Silver RSI hits 73, raising risk of profit-taking near highs.

- Silver extends four-week winning streak as Fed easing expectations fuel gains.

Thursday’s release of U.S. consumer inflation data showed headline CPI rising 4%, double the Federal Reserve’s target. Ordinarily, such a reading would weigh on non-yielding assets like silver. However, softer labor market data overshadowed the stronger inflation print, reinforcing expectations that the Fed will pursue a more aggressive path of policy easing. That prospect pressured the U.S. dollar, which slid to its lowest level since late July, helping sustain demand for silver despite the inflation surprise.

Silver price dynamics (July - Sept 2025). Source: Tradingview

As of Friday’s European session, silver had climbed over 2% on the day, reaching $42.46 and edging closer to the $42.5 threshold. The advance was accompanied by rising trading volume on the four-hour chart, providing confirmation that buyers were driving the move rather than short covering. Friday’s surge represents the biggest single-day gain of the week and adds to a sequence of three consecutive daily advances.

Silver RSI above 73 highlights overbought conditions and risk of pullback

The breakout is significant from a longer-term perspective as well. Silver has now crossed above the $42 level, a milestone not reached in more than 14 years. The move also extended silver’s streak of weekly gains to four, with the current week already producing a 3.8% increase. That is stronger than the advances recorded in each of the prior three weeks, reinforcing the view that momentum is building as investors look ahead to next week’s Federal Reserve decision.

At the same time, momentum indicators are beginning to show stretched conditions. Both the daily and four-hour Relative Strength Index have pushed into overbought territory near 73. While this does not immediately end the bullish phase, it does raise the risk of profit-taking as the trading week draws to a close. If sellers emerge, the $42 psychological level is expected to act as first-line support, cushioning any pullback and potentially setting the stage for further accumulation.

Overall, the alignment of macro drivers, technical breakout, and volume confirmation keeps silver’s outlook constructive. Even if short-term profit-taking surfaces, the broader trend remains tilted upward as the metal benefits from dollar weakness and expectations of Fed easing.

Silver trades near $38.65 after an early rebound, with U.S. data set to shape direction. Silver price outlook depends on holding the 100 EMA support on 1hr chart.

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